Major Pay Boost for UK Workers as Government Raises National Living Wage and Minimum Wage Rates
The increase will affect thousands of low paid workers in North Wales
In a landmark decision, Chancellor Rachel Reeves confirmed a substantial pay increase for over three million workers as the National Living Wage will rise from £11.44 to £12.21 per hour starting April 2025. The 6.7% hike means an annual boost of approximately £1,400 for eligible full-time workers aged 21 and above.
The National Minimum Wage will also see significant adjustments. Workers aged 18-20 will benefit from a 16.3% raise, taking their pay from £8.60 to £10.00 per hour—an increase expected to add £2,500 annually for full-time employees in this bracket. The government aims to create a single adult wage rate over time, marking the initial step toward this ambitious goal.
Leadership Reactions and Government Promises
Ahead of the Budget announcement, Chancellor Reeves remarked, “This Government promised a genuine living wage for working people. This pay boost for millions of workers is a significant step towards delivering on that promise.”
The Deputy Prime Minister, Angela Rayner, echoed the sentiment, emphasizing the need for equitable wages: “A proper day’s work deserves a proper day’s pay. Our changes will see a pay boost that will help millions of lower earners cover essentials.”
Record Increase for Younger Workers and Apprentices
For young apprentices, the wage increase is even more substantial. An 18-year-old apprentice, for instance, working in fields like construction, will see their minimum hourly wage jump by 18%, from £6.40 to £7.55 per hour. The changes are based on recommendations from the Low Pay Commission, an independent advisory body that works with the government to balance fair pay with economic feasibility.
Business Sector Concerns
The increase has met with caution from business leaders. Kate Nicholls, CEO of UKHospitality, warned that “these wage rises are well above expectations,” adding that they will contribute an additional £1.9 billion to hospitality sector wage bills.
She voiced concerns about potential job cuts and price increases, stating, “Trying to balance the books from the pockets of high street businesses will simply leave hospitality as collateral damage—threatening jobs, future investment, and business viability.”
John Foster of the Confederation of British Industries highlighted a similar issue, noting that “the pressure of rising minimum wage rates would make it increasingly difficult for firms to find the headroom to invest in tech and innovation needed to boost productivity.”
Young Workers to Benefit as Government Tackles Pay Disparities
The government’s approach to increase wages among young workers aligns with its goal of closing the pay gap between younger and older employees over time.
Baroness Philippa Stroud, Chair of the Low Pay Commission, explained the significance of these changes, saying, “The government has been clear about their ambitions for the national minimum wage and its importance in supporting workers’ living standards.”
The Trades Union Congress General Secretary, Paul Nowak, applauded the move as a step toward fair compensation for young employees, who often face an “outdated and discriminatory” pay structure. He asserted that “this increase will make a real difference to the lowest-paid at a time when rents, bills, and mortgages are high.”
Looking Ahead to the Budget
With the wage increases taking effect in April 2025, anticipation builds around the forthcoming Budget, as the government also signals possible tax adjustments to maintain fiscal stability.